DOCKET SECTION
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268-0001
POSTAL RATE AND FEE CHANGES,
RECEIVCt~
Nov 6
4 52 bi ‘9-i
1997
RESPONSES OF UNITED STATESPOSTAL
SERVICE WITNESS SMITH
TO INTERROGATORIES
OF ADVERTISING MAIL MARKETING ASSOCIATION
(AMMAIUSPS-T45-1
AND 2)
The United States Postal Service hereby files the responses of witness Marc
Smith to the following interrogatories
October 30,1997:
AMMA/USPS-T45-1
Each interrogatory
of Advertising
Mail Marketing Association, filed
and 2.
is stated verbatim and is followed by the response.
Respectfully submitted,
UNITED STATES POSTAL SERVICE
By its attorneys:
Daniel J. Foucheaux, Jr.
Chief Counsel, Ratemaking
/f,?_/,,
J&&f
Michael T. Tidwell
475 L’Enfant Plaza West, SW.
Washington, DC. 20260-I 137
(202)268-2998/FAX:
-5402
November 6, 1997
Response to AMMA/USPS-T-45-1
RESPONSE OF POSTAL. SERVICE WITNESS SMITH TO
INTERROGATORIES OF AMhfA
AMMAIUSPS-T-45-1
The following questions refer to LR-H-128, page II-2 (Bates No.21).
a.
Please confirm that the 80% DBCS share on line 14 of page II-2 is derived by
the method shown in the table below:
Equipment
Tvpe
(1)
Numberr
of Units
1 .DBCS
2.CSBCS
3.Total
4,723
3.726
xxx
(2)
Relativer
Productivitv
(3)
3
Capacity
Share
fCol (2) * Col (3)l fLine of Col. (3) % Line 3 of Col (3)J
(4)
(5)
14,169
3.726
17,895
1
xxx
79.18%
20.82%
100.00%
J’ LR-H-128 Page II-2 Footnote 2.
b.
C.
If you cannot confirm part a, please show the derivation of the 80% DBCS
share.
USPS Witness Daniel (USPS-T-29 Appendix I page 43 of 43 revised
10/01/97) presents the productivities shown in Column 2 of the following
table:
Equipment
Tvpe
(1)
I. DBCS
2. CSBCS
Productivity
[pieces/hour)
(2)
Relative1
Productivity
(3)
7,467
17,124
0.436
1
J’ Relative to CSBCS (Column (2) %0 17,124).
d.
e.
f.
Please explain why the relative productivity in the above table is 0.436 unit of
DBCS to one unit of CSBCS and that Footnote 2 of page II-2 of LR-H-128
assumes a relative productivity of a DBCS is 3.0 to one unit of productivity of
CSBCS.
Please explain in words and diagrams the meaning of line 4 of page II-2 (%
MPBCSlDBCS DESTINATING) and how it is computed. (Please define any
acronyms used.)
Please explain in words and diagrams the meaning of line 8 of page II-2 (%
DPSGIVEN BCS 3D DESTINATION) and how it is computed. (Please define
any acronyms used.)
Please confirm that line 13 of page II-2 is derived by the multiplication of lines
Response to AMMAIUSPS-T-45-1
RESPONSE OF POSTAL SERVICE WITNESS SMITH TO
INTERROGATORIES OF AMMA
::
i.
j.
4, 8 and I4 of page 11-2.
If you cannot confirm part f, please explain the derivation of line 13.
Please explain the logic of the computation that produces line 13 (% NONELIGIBLE AUTO CAR.ROUTE DESTINATING) and explain the meaning of
the result.
Please provide the standard errors of the estimates shown under column
headings STANDARD REG.NON-CRT, PR and STANDARD, REG CARRIER
ROUTE.
Please explain the difference between line 13 (% NON-ELIGIBLE AUTO
CAR.ROUTE DESTINATING) and line 20 (% CURRENT NON-ELIGIBLE
AUTO.CAR.ROUTE
DEST.).
Response:
a. Not confirmed.
b. The calculation
is correct as you’ve provided in subpart “a” with the exception that the
title of the third column should be changed from “Relative Productivity”
Capacity.”
In the engineering
studies of CSBCS requirements,
to “Relative
it was estimated that
three CSBCS would provide the same amount of DPS capacity as one DBCS.
In
another words, one DBCS will provide three times the daily amount of DPS letters as
compared to a CSBCS.
I am told this is based on the slightly higher throughput
of the
DBCS and that 3 passes are needed on a CSBCS versus one pass on a DBCS (the
second pass) during the critical processing window.
In addition, while the critical
processing window for the CSBCS is estimated to be somewhat longer than for the
DBCS, this was offset by the need to deploy a minimum of two CSBCS to a delivery unit,
to assure reliability
c. As indicated above in subpart “b,” relative labor productivities
are not used in LR-H-128
Response to AMMAIUSPS-T-45-1
RESPONSE OF POSTAL SERVICE WITNESS SMITH TO
INTEXROGATORIES OF AMMA
to determine the share of DPS associated with DBCS and CSBCS.
d. % MPBCSlDBCS
to 3digit
DESTINATING
is the percentage
of letters destinating
(or addressed)
ZIP Codes in the SCF service area of plants with at least one Mail Processing
Barcode Sorter (MPBCS) or Delivery Barcode Sorter (DBCS) (for each respective
category indicated in each column of page 21). As indicated at page 21 of LR-H-128,
this is the ratio of “LC9” to “LC7.”
LC7 is total destinating
the following 3digit
These variables are defined at page 5 of LR-H-128.
volumes (of letters and cards), excluding volumes destinating at
ZIPS which are APOs and FPOs: 90-98, 340, and 962-966, and
excluding volumes destinating
at the 5-digit ZIP Codes which receive only firm directs.
(An APO is Army & Air Force post office located outside the continental
An FPO is a Fleet post office for Navy and Marine personnel.)
destinating
at 3-digit ZIP Codes at MPBCSlDBCS
Codes receiving only firm directs.
sites, excluding the five digit ZIP
is applicable to plants with one or more MPBCS
For these plants, this is essentially the percentage
which goes to the 5digit
LC9 is the volumes
LC9 is a subset of LC7.
e. % DPS GIVEN BCS 3D DESTINATION
or DBCS.
United States.
of their destinating
mail
ZIP Codes that are targeted for DPS (those Sdigit ZIP codes
with 10 or more carrier routes) in the test year (for each respective category indicated in
each column of page 21). The formula for its calculation
provided in LR-H-128,
H-128.
is LC13/(LC9-LCI
1) as
page 21. Each of these variables is defined at pages 5-6 of LR-
LC9 is discussed above in subpart “d.” LCI 1 and LC13 are subsets of LC9.
LCI 1 is the volumes destinating
at 5-digit ZIP Codes which receive only P. 0. Box mail,
Response to AMMAAJSPS-T-45-1
RESPONSE OF POSTAL SERVICE WITNESS SMITH TO
INTERROGATORIES OF AMMA
for 3-digit ZIP Codes served by plants with MPBCS or DBCS. LC13 is the volumes
destinating
at ZIP Codes with 10 or more carrier routes, for 3-digit ZIP Codes served by
plants with MPBCS or DBCS.
LCI 1 is deducted from LC9 in the denominator
since we
are unable to say how much of the letter mail going to the 5 -digit ZIP Codes containing
only post office boxes is DPS. Not deducting LCI 1 would implicitly take the percentage
of DPS for this mail to be zero. An alternative
1 as discussed at TR6/1903-1904,
approach was used in Docket No. MC95-
though this probably was an understatement
of the
amount of DPS since non-“City” 5-digit ZIP Codes dedicated to post office boxes
receive DPS as well.
f.
Confirmed.
This is indicated at page 21 or II-2 in line 13 of LR-H-128 and shown on
sheet B of the spreadsheet
COVRAG98.XL.S.
g. Not applicable.
h. The meaning of % NON-ELIGIBLE
percentage
of total destinating
AUTO CAR.ROUTE
DESTINATING
is the
letter mail which destinates in 5-digit ZIP Codes that are
targeted for DPS on DBCS in the test year (for each respective category indicated in
each column of page 21). Letter mail is not eligible for the automation
carrier route rate
if it is going to a 5-digit ZIP Code (or zone) whose carriers receive DPS letters from
DBCSs, thus this is the percentage
presort rate. The logic of calculating
follows.
of letters not eligible for the automation carrier route
this using the product of Lines 4, 8 and 14 is as
The product of line 4 and line 8 of page 21 of LR-H-128 (which are described in
subparts “d” and “e” above) provides the percentage
of total destinating
letter mail
,Response to AMMA/USPS-T-45-1
RESPONSE OF POSTAL SERVICE WITNESS SMITH TO
INTERROGATORIES OF AMMA
which destinates
in 5digit ZIP Codes that are targeted for DPS in the test year year (for
each respective category indicated in each column of page 21). Line 14, as discussed
above in subparts a-c is the share of DPS to be done by DBCS in the test year,
Multiplying
Line 14 times the product of lines 4 and 8 provides the percentage
of letter
mail (for each respective category indicated in each column of page 21) which
destinates
in 5digit
ZIP Codes which are targeted for DPS via DBCS in the test year
and therefore ineligible for the automation carrier route presort rate.
i.
The standard errors for the line 13 of page 21 of LR-H-128 are not available.
there is no straight forward formula that applies, consequently
I am told
an analysis would need
to be done to develop this.
j.
Line 13 (% NON-ELIGIBLE
AUTO CAR.ROUTE
DESTINATING).and
CURRENT
AUTO.CAR.ROUTE
DEST.) are both the percentage
NON-ELIGIBLE
letter mail which is noneligible
line 20 (%
for automation carrier route presort rate. Line 13 is the
test year forecast, while line 20 is the actual percentage
based on Address Management
non-eligible
in early 1997
System data. As DPS on DBCS is extended to more 5-
digit ZIP Codes the line 20 percentage should rise to the line 13 percentage.
calculation
of
The
of line 20 is the ratio of LC14 to LC7. LC7 is discussed above in subpart “d.”
LC14 is a subset of LC7. It is the ODIS volumes destinating
Codes which are were designated
as non-eligible
for automation
rate by the Postal Service in early 1997. This list is contained
128. in the file “DNOACRZ.DAT.”
in the list of 5digit ZIP
carrier route presort
in the diskette in LR-H-
This is from the Postal Service’s National Customer
Response to AMMANSPS-T-45-1
RESPONSE OF POSTAL SERVICE WITNESS SMITH TO
INTERROGATORIES OF AMMA
Support Center, Address Management
System, Vol. 2, February, 1997, file “ctystate.zip”
of 12/1596, which is provided to mailers in making up their mailings.
RESPONSE OF POSTAL SERVICE WITNESS SMITH TO
INTERROGATORIES OF AMMA
AMMAIUSPS-T45-2
Please provide the standard errors for each estimate shown on page II-I (Bates No.20).
Response:
Pages 395 to 409 of LR-H-128 contain the volumes shown on page 20 (under the heading
“Total Volume”) and the relative margin of error for each volume estimate.
I am told the
standard error (SE)can be computed from the relative margin of error using the following
formulas.
First, note that the relative margin of error (RE) is:
1.96 *SE lOO/Total Volume.
The formula for the SE is therefore:
RE”Total Volume/l 96.
I, Marc A. Smith, hereby declare, under penalty of perjury. that the foregoing
Docket No. R97-1 interrogatory responses are true to the best of my knowledge,
information, and belief.
.I
9%d$b%d
Marc A. Smith
CERTIFICATE
OF SERVICE
I hereby certify that I have this date served the foregoing document upon all
participants of record in this proceeding in accordance with section 12 of the Rules of
Practice.
,,4,I_
Michael T. Tidwell
475 L’Enfant Plaza West, S.W.
Washington, D.C. 20260-I 137
November 6,1997